tv Bloomberg West Bloomberg January 13, 2014 11:00pm-12:01am EST
>> live from pier 3 in san francisco and new york, welcome to the late edition of "bloomberg west," where we cover the global technology and media companies that are reshaping our world. i'm emily chang. our focus is on innovation, technology, and the future of business. let's get straight to the run house. a service designed by the guy who helped to make the ipod. now he is selling nest labs to google for more than $3 billion. charter makes its move, offering to buy its major rival, time warner cable, for a massive sum,
over $60 billion. and it is the check-in app that many had given up on, but now foursquare is telling you what is nearby and giving you ads on the spot. we speak to the ceo about the turnaround. first up, google is buying nest labs in an all cash deal, still subject to regulators. it is part of google's push deeper into devices. nest was founded in 2010 by former apple executive tony fadell and matt rogers. our senior west coast correspondent jon erlichman has
been following this story from l.a.. as i mentioned, fadell and his cofounder --nest feels like apple. i always thought if anyone would die them, it would be apple. why google? >> as for the position for google, apple, and samsung in the story, here is how things may be playing out. google has never shied away from doing an acquisition if it allows them to go into a new area. you wonder if this is their key to getting into the connected home and a bigger way, which you just alluded to. i was at the consumer electronics show in las vegas. you see the internet connected everything. light bulbs, etc. google always comes up in those conversations. you have samsung and air flashier ways getting into the kitchen. i think google -- buying right
now allows them to get into this world with a really smart people who are dedicated to continuing down this path. to answer your question, maybe apple is working on some of their own stuff. who knows? that would be my speculation. >> you always wonder what is going on with google. they are working on driverless cars. android could be on not only every smartphone, but every appliance. what is the big picture for google? >> the pieces do not have to come exactly together. to say that it will come together with thermostats -- i do not know we can say that. what we can say, google, led by larry page, is very focused on the future. different industries. going where technology is changing those industries. whether it is mobile, robotic, what is happening in the kitchen, i think those are areas
of interest for google and that is a big part of this deal. >> we are going to go deeper into this deal. ari levy is joining us from new york. why google and not apple? >> internet search for google has been the core business, desk top search and advertising. increasingly, the internet is not based on search. it is not based on desktop. it is what you're doing on your mobile phone, what you were doing on your tv. what you're doing in your living room. what your thermostat is doing. those are not areas where google is a leader. that is where the internet is going. you will knows if it wants to continue to be the internet company, it has to go to where the internet is being used. that is why the data here is crucial to google's business. apple -- we have not seen apple
spend this kind of money on companies. apple may be interested in that and not willing to pull the trigger because they do not want to spend the cash or the hubris of the company does not allow them to, we do not know. >> apple may be a little trigger shy. we were talking all last week about the consumer electronics show. samsung announced to the connected home. companies are in watches and glasses and smart tvs. apple is doing none of that. is apple a little bit behind, jon? >> if we could see everything apple is working on, we might go, oh, i get it. of course apple does not want to tell us, so we cannot answer that question well. you also wonder if apple were to do a deal like this, it would raise questions about whether bringing tony fidel -- fadell back into the company, whether that would create all these new
storylines. they had a pretty good -- there was a focus on this company from google's capital. they had a focus on where this economy was going. if there was a thermostat -- that may have gotten them excited and in turn google got excited and said, hey, $3 billion-plus, that is good with us. >> i interviewed tony fadell three months ago and he gave zero indication he was interested in selling the company. i asked him about how he thought more broadly about future products or nest. take a listen to what he had to say. >> inc. about us smartphone, all of the sensors in a smartphone,
think about a smartphone, all of the sensors in a smartphone, and what kind of apps you can layer on top of it? >> so what is next for nest, ari? they have done a smoke detector. what else? >> going to the digital world -- everything can be monitored. things that i put on my stove, to boil water. anything in a home, why couldn't it be connected westmark why couldn't nest be the software or the hardware layer for it? >> thank you for weighing in on it. we will be speaking to tony fadell tomorrow on the early edition of "bloomberg west" tomorrow. charter communications is making up big bid for time warner cable.
they had a buying offer for $61 billion -- i said $61 billion. the ceo talked about using time warner cable to create a internet and tv provider. he has not received a serious proposal from time warner cable and will bring it to shareholders. it is great to be there with you in person. at what is going on here? why make a bid for a company that does not want it? >> it is getting the ball going really. charter has made the decision, time warner is not going to engage. let's take this to shareholders. let's not keep banging our heads against the wall with a company that does not want to anthrax. -- to interact. we will take this to shareholders and see what we can
do -- but snarky banging our heads against the wall of the company that does not want to interact. we will take this to shareholders and see what we can do. >> what are shareholders going to say? >> that it is not enough. they almost certainly will not agree. from what we hear, time warner could counter with an offer of well over $150 per share. they will probably meet in the middle. the question is, can a deal get done with charter, or can another cable company get involved like cox or comcast. >> what is charter to get bigger? >> this would make them much bigger. it would give them a lot more leverage to negotiate with content companies. they would also be able to have potentially more as validation down the road, maybe even get as big as comcast.
west." i am emily chang. we are east today. sam grobart and is here with us at the desk all week long. the space for tech companies in new york for the last year has more than doubled. not just manhattan, but also brooklyn. maybe new york can compete with san francisco for office space, but what about talent? you not only founded foursquare here, but also dodgeball, which you sold to google.
>> that is right. >> you are kind of a godfather out here, aren't you? >> i don't know. that's kind of a heavy term. i have been in the tech season for number of years -- and the tech scene for number of years. >> did you ever get criticism for coming out here? >> the first question we got was why did you start in new york? we wanted to build a really rock star engineering team in new york. >> we have seen a number of waves of tech year in new york. how would you describe this current one may be compared to the last one? >> it seems like it goes in waves. it would get built up and go away, get built up and go away. i think this version is built to stay for a while. we have had multiple generations of entrepreneurs.
it has really helped companies grow and be successful. >> i think the number of startups hit the five-year high last year. you do not often see a startup in new york break into the multi-billion-dollar valuation category. you know? is there something that holds companies back? we were just talking about branch. facebook. tumblr. >> i do not think it is holding back. i think it is a matter of time. if you compare the new york scene to the valley. the scene in the valley is decades-old. new york may be a decade old. i think when you get more companies in new york -- between tumblr and etsy and mongo -- there is plenty of opportunity for those things to grow. >> you are seeing more companies set up shop in brooklyn as
opposed to lower manhattan. i assume that is because that is where people live. >> yes. if you live there, it is more accessible to you. it's also get a really fantastic office space. a lot of our employees live downtown. it's easy for them. i imagine a lot of folks are seeing that type of space in brooklyn as well. >> we are looking at a map of check out pennies that are expanding. we have facebook, google, yahoo! later in the show we will talk about artificial intelligence. simply to get to your point about resources, there is -- >> to get your point about resources, there is also an academic community. it is not the same as stanford and cal. >> i think the thinking five
years ago if you were a really talented computer scientist, maybe you would end up on the list and that would be the first choice. i think it is a hard decision now. do i want to go to new york or san francisco? >> not to mention that wall street was snapping up a lot of engineers. maybe some of those people not in the world of finance anymore -- >> sure. they make fantastic data scientists. for folks in our space particularly, we are doing a lot of things with big data and analyzing that data. >> i want to talk a little bit about trends. you post a lot on twitter. you are on instagram. what do you think about the social media landscape? twitter versus facebook versus snapchat. what do you think aboutsnapchat? >> i do not use it so much.
i think now that there are a number of tools for people to use, they use what they are capable of. i use foursquare, twitter, and maybe a little bit of facebook. >> do you think that they were right to turn down $3 billion for facebook? you sold the company wants. >> i can empathize. you come around to thinking your way of thinking was not right. i respect that. >> we will talk more about your grand vision with foursquare. we have these ceo of foursquare. we will talk more about his turnaround plans, coming up on "bloomberg west." ♪ >> welcome back to "bloomberg
west." i am emily chang. i am here with sam grobart on the set in new york. we are talking about foursquare. the company last year raised $40 million worth of debt and another $35 million worth of funding. foursquare's ceo dennis crowley is with us as well. you are using this money for the new foursquare. more of a location discovery app. tell us about it. >> foursquare has always been about location discovery. two things we have been thinking about -- how to monetize the users and the second big piece of it is exploring what we can do with ambient location awareness. what if you do not have to
check-in everywhere you go? your device knows that you're an adult and that -- another part of town. so continuing financing and getting the company well-funded is another step on a roadmap to executing the vision. >> i know we talked at the beginning of the year and the end of the year, and you had about 6 million chickens per day. -- check-ins per day. is that growing? >> there are a lot more people using foursquare for search and discovery. the usage has started to shift a little bit. >> personally -- >> yes. >> i will confess, i did not really care about checking in. i'm married, i've got kids. but when i realized i could use it as a recommendation engine, when i realized i was not just broadcasting my presence, but i could see where my friends had been in what they like, all of a
sudden it sort of snapped to me. that is more in line with one forward now. >> we use it all the time for this. we use it or search and discovery. it is so much better than yelp. it is so much better. we are continuing to explore that. one of the things i am most route of this year, we have a version that recognizes when you go into a new place. if you walk into a restaurant or clothing store, we can alert you there is a special here. you can save 20% if you use your amex. if you walk into this restaurant, this is the best dish on the menu. it's a really powerful thing. we are one of the only companies that can do that. >> talk about the moneymaking potential. you guys are expected to make a lot more money this year than last year. how? >> we have been a lean beast tools that are really effective to drive customers into businesses.
-- we have invented these tools that are really effective to drive customers into businesses. >> to see the next part of the chain? >> yes, exactly, to evaluate the roi. that is something that we can do because we have all of these check-in's, that no one else can do. >> can you give us a sense of what you are expecting this year? >> we do not have to share those things -- >> you do not have to. >> i would ruin the surprise for 2014. every quarter we hold revenue all the way to 2013 and we expect really great things by the end of this year, too. >> devices going into wearables do you envision foursquare having a big future in wearable technology?
>> our vision is not so much something that you pull out of your pocket and use all of the time. what can we do with displays on the wrist question mark what can we do possibly with google class? we have -- what can you do with displays on the wrist? what can we do possibly with google class? we have a prototype. that is really exciting for us. >> we will be back with more with the foursquare ceo dennis crowley. ♪
>> i am emily chang with your bloomberg top headlines. sprint was the last of the four to show an early upgrade program. they just ended the want of a program for month after launching it. no explanation given. traffic to the website is diverted to a family plan. taxi companies around the world and the latest battleground is in france. that is where protesting taxidrivers attacked an uber car. the cofounder were both in the
car and tweeted about the incident saying they were shaken up but not heard. group on makes an acquisition as it looks to expand into the apparel sector. daily deals of/sales for 43 million dollars. it sells clothes and home decor at a discount. group onset it is seeing growing customer demand. >> we are in new york this week with the senior writer for bloomberg businessweek. we're kicking off a special series today. they are talking about how big companies are using it to dramatically change the way we communicate here. with us as a scientist and the creator of ibm's watson computer. this whole idea of a personal robert is age old. how did watson come to be?
>> it is about pressing the envelope, breaking new ground. so many executives thought can we create a computer that can compete with humans and do incredibly hard human tasks. it was an amazing opportunity for a richard scientist like myself. for my entire life it was all about can we get computers to mimic the way humans think? taking it step by step. >> isn't one of the things that makes what and so special is its ability to function with natural language? >> that is one of the biggest challenges. how do we understand language? computers are going to data jockeys to thought partners. it is about understanding what they see. what is the meaning behind it? ultimately meaning is going to just trump data. there is too much out there. how do i get an understanding of it? >> when it comes to language understanding, where would you say we are right now?
are we at the toddler or adult stage? we have seen things go from watson to siri. >> it is not like that. if you do something sophisticated that would take a smart person hours or weeks to stitch together and figure out and then in other areas it will seem really stupid. computers process the data very differently than humans do. i think one of the interesting going forward is in dutch is can we get more of a convergence and machines to think more like humans? can the process data in a similar way? we are not there yet. there's a lot of work to do. >> this is something you think about a lot in terms of contemplating the future. >> we think a lot of the
intersection between people asking computers questions and asking them for advice immersing the computers being really proactive and recognizing the context and say i know you do not ask me for anything but i sensed something was going on. >> and tuning into that context. how ai will progress is that to really get computers to start and process this they have to collaborate together. there is this joint intelligence idea. i the computer have to learn from you be human and the human has to learn from the computer. you have this interaction working as you both work together. that is where the style of learning will change. >> can watson feel? can he sense a motion? >> you're asking a really great question. >> is that a problem? >> computers and humans are not the same thing.
when you and i taught, we are using language with an elaborate indexing system two point to our shared experience. that shared experience as a human experience. you have learned things. when we speak i look at you. i do not know, the only way i know if you understanding these words is you are nodding right now. that is feedback saying maybe my words are pointing into her brain somewhere and we have this common understanding. humans do not have that --i am sorry, he computers do not have that. they have massive amounts of data but not the human experience. quite so there is communication happening. >> exactly. it is usually contextual. if you are using all kinds of information for around you. you mentioned foursquare. you want to capture more and more context. the more features that can allow you to narrow into what you mean by a particular word or phrase is going to facilitate that dialogue between a human and the scene. >> did you see the movie "her?"
>> not yet. >> i have seen appeared i thought it was great. >> it was amazing. it created a really thought- provoking and seemingly plausible/possible future with a computer that has a sense of humor, to understand what you're saying. that is the thing. humans are the source of meaning. we are the source of what is funny. we are the source of what is beautiful. we are the source of what is elegant. computers can start to learn and detect that meaning. they are not the source of that meaning. while watson can detect a pond, it is not laughing at the pun. it can detect it and you should laugh at it. >> what are some of the things that watson will never be able to do? >> we want to be really careful of saying never. >> always. that is what it is a good
question. >> to move from the shallow understanding of language that we have today with things like watson to a deeper understanding where computers can really get the deep meaning and dialogue and collaborate in a meaningful way. things are going to have to change in advance quite a bit. my view is that we're going to see an interaction between human and machine that is quite intimate. you are working in solving a problem together. the computer does not know the answer. you do not know the answer. you have access to a number of features. the computer can access data and process it in ways that you cannot. you work to solve that problem. through that process, the computer is learning how you interpret the information. you get that which will create this joint intelligence. that is really; cool to me.
>> can ask you another question? we were talking about new york city as a tech help. ibm is moving the watson operation to watson. >> i work for ibm but i'm not a spokesperson. i read the news when you did. that is fantastic. i think you are exactly right. i think they made a big investment in manhattan and ai. for me to see, who has been in ai forever, to see that kind of investment pop up -- >> how do you see google and facebook staking out their territory in ai? who is going to do what? >> and foursquare.
>> web search has no choice but get smarter. there's too much data. it is going to have to sympathize and understand reasons, synthesize. answering the questions and giving you the exact information. it has to go beyond the shallow pattern recognition into the deep understanding. >> had to think we're going to interact with a lot of these engines? is it being more proactive? >> it will be multimodal. there'll be different ways to facilitate. some things are really easy to do. some are easier to do typing. i think you're going to see more interactions occurring.
>> how do you see ai in the future of foursquare? >> that is what we are trying to do. we can start to detect your with some friends. you're walking this direction. you never been to this paper shared -- to this neighborhood. >> you're collecting an enormous amount of location data. >> we're listening to all the signal we get from the foam. they are just sensors. we listen to as many centers of possible and try to push information we think will be useful to the user. it is a form of a lot of this ai that we're talking about. >> in terms of getting down to business, i know you do not work for ibm anymore. ibm is betting big on watson. it could have a potential $10 billion in revenue. they sounded very difficult to turn it into a business. customers are saying it takes watson too long to learned information we need and it is an arduous process for ibm to input
all of the information from specific businesses in order to be able to answer questions correctly. what kind of challenges is ibm going to run into when it comes to turning into a real business? >> there are a lot of challenges. i think ibm is going to have a leg up. they're going to make the kind of advances that are needed. the hope and the expectation has to work this way. through more sophisticated learning outcomes will make it cheaper and cheaper to customize the technology. are we there yet? we are on the road. how do we make it cheaper and easier to customize the solutions? had we worked on these learning rhythms? these have to be extremely
powerful and take advantage of continuous collaborative interaction with humans. it is not like let's go trade in the closet and come out. it has to continually learn as it is interacting with humans. >> it will be a long process. the creator of watson. you are a senior technologist there. dennis crowley, i know you're off to san francisco. you're literally getting on a plane after this. thank you so much for stopping by today. the biggest players in the auto industry dissenting on detroit for this year's auto show. we will speak with the ceo of mercedes-benz usa next. you can watch a streaming on your phone, tablet, and bloomberg.com. ♪
>> the auto show is happening right now in detroit. one of the big things this year is affordable luxury cars, high- tech luxury cars, too. matt miller has been at the auto show all week long talking to the biggest names. how's it going? >> it is going fantastically well. i'm having a lot of fun here. i am here with the head of mercedes usa north america. let me ask you first of all, when i think is silicon valley or the guys i hang out with that are from there or silicon valley in new york, a lot of people are getting into the cla because they have done one may think it would be ostentatious to get in s class already. >> what is neat about that is they want a smaller vehicle like the c class or the cla. and bring in new buyers. we just launch the cla. it is 10 years younger than the c class. we're bringing younger folks in. eight in 10 people that buy one
are new to the franchise. it is duke exactly what we wanted it to do. >> you're starting to build in tuscaloosa. m re: build a lot of the cars that you sell here. really a growing business. your number one and luxury cars here. >> we had a great year. they outgrew the luxury market. this launch past year. >> such a rave reviews from everybody. the smallest blocks to the largest car magazines loved it. this show focuses on tech. this is one of the most logically advanced cars out there.
>> what is so neat is all the technology is going to be available in the c class in a car that will star in the need 30s. gone are the days when only biggest loser folks that's been said of $5,000 for their car -- that spend $75,000 for their car get the latest breakthroughs. that is coming to a brand-new price point. the c class will be the most intelligent car in the planet. it will be able to have semi autonomous driving. >> it sees 360 degrees around you. it makes a 3-d picture of its position in space and then respond accordingly. it is tech in its best form. >> how long until i can get on the 401(k)? >> all of these are in place. it is only a matter of commercializing them at a cost that customers can afford it. then it will have to be legislated. it'll have to be insured.
to answer your question, and site 10 years is about the timeframe when you might be able to just put it in your navigation and off you go and have a nice chat with whoever you are driving with. >> thank you so much for spending time with us. 10 more years until you can have your car commit -- commute to work for you. >> that will be a long way. how fun. coming up we'll be talking about the golden globes, amy poehler, and tina fey. they were fantastic i thought. netflix became the first reaming service ever to win. more on that coming up. ♪
>> tina fey and amy poehler hosting the golden globes. i thought they did a wonderful job. nbc said it got the highest ratings in 10 years. robin wright won the golden globe for best actress in a tv drama. she is in the netflix original series "house of cards." it is they first golden globe. john ehrlichman is with us from l.a. there is a lot of talk about netflix. they got a lot of nominations but they only won one. was it a good night? >> it only takes one to keep the conversation going. what is so amazing about the show is that when they started production on a, they didn't even know if they would be eligible for awards. then they ended up being a key part of the conversation around the emmys. david fincher ended up winning one. then the conversation tied to the golden globe. we have a golden globe he cuts of her win. the big benefit short-term will
be that the second season of the show will be debuting at about a month time. maybe they will watch it and get interested in watching the second season. they are looking to top how each original is doing in each season of the programming plan. >> a lot of people do not realize that house of cards was not the netflix original series first. lola hammer is coming back for a third season. that show did not get rave reviews. a something it should not get a third season at all. >> we do not even know what any of the ratings are for any of the shows. netflix has the information and does not share it with us. it has found a certain audience. he was looking like the smartest guy in the room thinking about what netflix would be in that people would be watching on all
their different devices. original shows become that much more important. i will tweet out that video for people who never saw it. you want smart people? stevie. that is your man. >> it is time now for the u.s. by -- the bwest byte. >> 191 million. it estimates the number of paid subscription listers around the globe will get to that number by 2019. we are nowhere near that number right now. we say this because the tag behind beats by dre just came out with their own streaming service. they're going after all the people who might be willing to
try something other than spot of five. >> i am a lazy listener. i like pandora. i do not have to do too much. >> i listened to all of these things. it is my job to. for all of eastern services that are out there, s it is spotify, google. no one has cracked it. it is because of ease of use. they seem to model their interfaces off of itunes which is like building a new cruise ship and saying i'm going to base it on the titanic. it is really complicated. it can turn a lot of people off. if beats can make it more intuitive, they may have something. >> if you're going to pay for, it has to be good. thank you all for watching this addition of "bloomberg west." we will see later today.